Good morning, ladies and gentlemen. Welcome to Itaú Unibanco Holding conference call to discuss 2014 third quarter results. [Operator Instructions] As a reminder, this conference is being recorded and broadcasted live on the Investor Relations website at www.itau.com.br/investor-relations. A slide presentation is also available on the site. The replay of this conference call will be available until November 11 by phone on +55-11-3193-1012 or +55-11-2820-4012, access code 1599139#. Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Actual performance could differ materially from that anticipated in any forward-looking comment as a result of macroeconomic conditions, market risk and other factors. With us today in this conference call in São Paulo are Mr. Alfredo Egydio Setubal, Executive Vice President and Investor Relations Officer; Mr. Caio Ibrahim David, Executive Vice President and CFO; and Mr. Marcelo Kopel, Corporate Controller Director and Head of Investor Relations. First, Mr. Alfredo Setubal will comment on 2014 third quarter results. Afterwards, management will be available for a question-and-answer session. It's now my pleasure to turn the call over to Mr. Alfredo Setubal.

Thank you. Good morning for those who are in the U.S. ,good afternoon for those who are in Europe. It's a pleasure for us to be here to comment about our third quarter results. For those who are following through the Internet, we are starting on Slide #2, the highlights for the quarter. First one, of course, is the result, the net income. The recurring net income of BRL 5.5 billion. We saw solid growth from the third quarter -- from the second quarter of almost 10% and 34%, when we compare to 9 months of last year. These solid results provide recurring ROE of 24.7%, that is the biggest, the highest ROE in the last year, when we compare the quarters, with an increase of 100 basis points from the second quarter and 380 basis points, when we compare to last year. The better credit quality of our credit portfolio, we are also in the lowest level in the history of the bank, 3.2% when we consider the NPL over 90 days. We were able to improve 20 basis points this quarter and 70 basis points when we compare to last year. Margin with clients was also, again, a solid quarter. In terms of revenues from the operations, from our clients, both in terms of credit, in terms of services, BRL 13.3 billion in the quarter. Financial margin with the market was the best quarter when we compare to the last 2 years. The conditions of the market and the positions that were taken, and the hedge and everything worked very well this quarter, even though the volatility of the local market and international market. But anyway, it was a quarter both the average -- historical average was a very good performance for us. Loan loss provisions at BRL…

[Operator Instructions] Our first question comes from Philip Finch with UBS.

First of all, can we just start macro wise, what are your forecasts internally for GDP growth next year and the Selic? And related to that, what should we assume in terms of loan growth for you next year? Clearly, it's slowing down. Should we assume that trend continues next year? And secondly, just in terms of the cost expenses, which you very helpfully explained. There were some distortions from the Credicard acquisition. But given the IT expenses and the data centers, you're still going to have 3 or 4 for the next year also and it won't come down to 2, should we assume that cost growth should remain above inflation next year?

Hi, Philip. This is Marcelo. Regarding our view on the macro, what we have for GDP next year is a 1.3% real growth. Selic, we envision finishing this year at 11.5% and next year at 12%. In terms of our loan growth, we're still wrapping up the -- our budget process. But as of now, it should be close to nominal GDP plus something. So that's where we are at the moment. We're going to be finalizing that and give you more transparency over the fourth quarter earnings call. Regarding IT expenses, you mentioned the data center, which was mentioned by Alfredo. Our aim is to grow at inflation or inflation plus. So you may consider a small plus over inflation, given the data center investments. But that shouldn't be a meaningful -- but that shouldn't be a meaningful number, that plus that I mentioned to you.

Our next question comes from Tito Labarta with Deutsche Bank.

A couple of questions. First in terms of your net interest margin. You mentioned you'd expect it to remain relatively stable, as you have been able to increase the spreads on some of your loans. About the recent increase in rates and you just mentioned you expect it to reach -- to continue rising to next year. Do you think there could be any upside to that? Or what will be the sensitivity to the rising at Selic? And then the second question, in terms of the asset quality, you continue to deliver pretty good results there with asset quality still improving. At what point do you think that could start to shift and you could see some deterioration? I mean is that maybe end of 2015, or do you think you could still see some further improvements? I just want to get a little more color on how you see asset quality continue to evolve.

Thank you, Tito. On NIM, our view is that it should remain relatively stable, given the different moving parts we have on that by, let's say, renewals coming at a higher rate than the previous rates. But the mix shift is still playing a very important role, given the growth differential that you have between the different portfolios. So that's something that should keep it relatively stable. You mentioned the Selic rate, the market now is very competitive. The price dispersion that you see between banks has reduced. So we don't see much room for having -- you could see increase in rates, but not necessary increase in spreads, given the competitiveness of the market. So that's where we are regarding the Selic rates. On last, we see, let's say, a meaningful deterioration where we basically, we're going to be risk adjusting the price to reflect that. But that doesn't change our risk appetite. So for that end, we should -- don't see much change on the rates other than our own cash, which, obviously, benefits for the Selic rates. Regarding asset quality, you asked at what point we could see a shift. I mean, the shift on the economy -- we are, let's say less correlated to the economic environment now because of the mix shift. That should probably continue towards next year unless you see a major disruption, which is not our base case scenario. But you could see that changing towards the end of 2015, and starting 2016. Meaning that we're going to more pegged -- our, let's say, credit performance will be more pegged to the economy than it is now because of the mix shift that we have.

Our next question comes from Carlos Macedo with Goldman Sachs.

Alfredo, Marcelo, I have a couple -- one question, actually. I mean, looking at your ROE, almost 25%, it is about as high as it's been in the last several years. And the outlook that you laid out with a weak GDP growth, higher rates, your margin is looking as they were going to be flat throughout the year. Maybe you don't get the tailwinds from provision expenses that you had in the last few -- in the last several quarters. When you put all that together, it does look like earnings growth is going to be weaker next year than it was this year, maybe 10% to 15%, something like that, which probably leads your margins to -- or your ROE to contract from where it is now, given it is at a very high level. Is there anything the bank can do, I mean, on the expense side, on the fee side or generally, to sustain that kind of growth that we've seen from earnings? I mean, potentially, if you do get some pressure on NPLs, it could be even lower than that. But is there anything the bank -- any levers the bank can pull outside of the -- of what's pushed by the economy to sustain the level of growth in earnings?

Hi, Carlos. Thank you for your questions. I mean, if you think that the -- if we say that ROE, let's say, just for argument sake is 24%, okay? And we pay 1/3 of that as dividend, so you're left with -- we pay 8% out of the 24% ROE, so we are left with 16%. So anything on earnings growth below 16% will be a, let's say, a reduction in our ROE, so it's just to work the math. So basically, we are focusing on all the levers that you mentioned. On costs, we are focusing on increasing our services to our clients. The quality of the asset portfolio is helping us, the credit portfolio is helping us. But net-net, what we could see -- another avenue that we can see of growth is insurance. We're underpenetrated on insurance. But given the participation of insurance in the overall results, it's hard just to say that we're going to sustain the entire ROE or even grow the ROE based on that. And you correctly mentioned about the tailwinds we had on credit this year, which is something that is unusual for you to grow the portfolio, increase revenues, take less risk and reduce your credit cost. So it's a -- let's say, it's something that we would focus to do on the different levers. But it's hard to expect the ROE to be kept at nearly 25% next year.

So, I mean, so it would be reasonable to say that we're at the peak of the cycle here. And I'm not talking specifically about Itaú necessarily because several of your peers have had the same kind of behavior in terms of NPLs, and you're probably better about NPLs and margins.

Yes. You could say that, that's, let's say, a high point of our -- let's say, historical fact. Hope I'm wrong. But that's the alignment of several, let's say, positive factors that we have in this quarter. So for net-net, we still are confident we're going to be delivering ROEs over the course of the next quarters over 20%, 20% plus.

Perfect. A follow-up to that is, the scenario that you outlined is generally aligned with the market consensus for next year. You were talking about being a little bit more -- less pro-cyclical than in the past. How does that relationship evolve over time? Are you really -- what is -- if GDP growth slows to less than 1%, say 0.5% next year, if we do see unemployment climbing up from 4.5%, 5% to 6%, 6.5%, is Itaú really that protected from a negative environment or a more negative environment than is currently expected?

Carlos, all the preparations, everything we started 2.5 years ago in terms of the derisking, the less dependency on credit revenue by means of increasing fees. Everything was done to make the bank more resilient to, let's say, a downturn scenario. You could see upticks on, let's say, on certain credit lines like credit cards or overdrafts line, which basically what we spoke I think in the second quarter. But the overall portfolio, to some extent, and I'll give you the auto financing portfolio as an example. Our NPLs in this portfolio are going down, even though the portfolio is reducing. So it's hard for you to reduce the NPL when you're reducing a portfolio. And now NPLs are going down there. So we -- to some point or to some extent, we believe we can shelter the pressure but we'll only know when we get there. And unfortunately, that's as much as we can give you in terms of clarity. So let's say, lots of moving parts. And to some extent, we believe we are sheltered. But we'll see.

Our next question comes from Mario Pierry with Merrill Lynch.

Let me ask you 2 questions. The first one is related to fee income growth. Excluding the acquisitions that you made, when we look at current account fees and loan operations, they are still growing close to double digits. So I wanted to understand from you is your ability to increase prices to sustain fee income growing at a double-digit pace in the future? And if you could also comment on Redecard. It seems like Rede finally was able to gain market share from competitors for the first time in almost 2 years. If you could tell us more about your strategy in Redecard going forward? And then I'll ask a second question later.

Thank you, Mario. In terms of fee income growth, the big growth this year hasn't really come from increasing prices, but basically, the increase of services offered to clients and a large number of the clients buying into the new services that we are providing. We have differentiated services on Uniclass. We have MaxiConta with cellular -- with credit on your prepaid cell phones. We have a number of new packages and offers that clients did sign up for that. So basically, that's where the increases are coming in current accounts. Insurance also is an avenue of growth for the following year. We mentioned bancassurance, and that's a very promising area for us. So part of the strategy is to continue to focus on that. Obviously, the credit card market is something that is probably going to be growing mid-teens next year. And 1/3 of our fee lines comes from credit cards. And that doesn't include the interest on non-credit cards. But also, only includes the MGR from the acquirer and the interchange that we -- and the annual fees we have on the issuing side. So payment is an avenue that we will continue to grow. And the economy is still going to be moving, and we are benefiting from that end. So if the fee growth next year is not something at mid-double-digits, it could be at least very low double-digit, so a high single digits, okay? Regarding your question on Rede that we might have gained share, the strategy has been since the delisting of the company, to have the bank working closer to Rede. Now we can see this crystallizing by the bank being closer. The new segmentation that we have on small companies, where these companies are being serviced in our branch network. So that brings the bank closer to the acquirer. The number of affiliations of the bank nearly doubled in the last 18 to 12 months. So Rede has been gaining ground and traction with the bank, and that is reflecting in, let's say, more activation and more volume. So this is something that should continue, and that was the primary objective of having Rede as part of the group or fully owned by the group, which is to be able to have a holistic approach to the clients.

Okay. That was very thorough. Let me ask you then my second question is with regards to costs. But here, my concern is more like we continue to see a very weak economic environment. We're seeing the loan growth decelerating, and it seems like you are not too excited about loan growth next year either. So I just wanted to get from you about how comfortable are you with your current headcount? Or is there room for you to be reducing the headcount in the coming years if the economy doesn't improve?

Mario, we managed -- we don't have like targets for headcount. I mean, we manage the bank based on being able to produce more with the -- and gain efficiency. So based on the churn that we naturally have out of the bank, we're able to manage the headcount. And if we have to manage the headcount down it's not going to be by a major restructuring, by proactively managing the turnover. And the people who can be retrained, we retain them. We have a high rate of people who are retrained and relocated within the bank. But that gives us a buffer to manage, let's say, the bank in more difficult times if we have to manage down the headcount. But there is no restructuring program in place that we'll need to do it.

Our next question comes from Marcelo Telles with Crédit Suisse. Marcelo Telles - Crédit Suisse AG, Research Division: I have 2 questions. The first one, was there any impact in your results resulting from the depreciation of the real or you were like pretty much hedged and there was no impact at all? And the other question is regarding your provision expenses for the quarter. We saw there was quite a bit of an increase in provisions in the wholesale division of the bank, which would indicate something in line what you just -- what you said about some specific, corporate loans that had to be provisioned for. So do you think we can see, let's say, an improvement in provisions in the wholesale division in the coming quarters, or do you expect those provisions to remain more or less at the same level?

Telles, thank you for your questions. We have no impact of the real depreciation. I mean we were fully hedged on that. So it's no material changes in our number regarding that. Regarding the loan loss increase in wholesale, as Alfredo mentioned, we did change the rating of certain corporate names. No concentration on any specific economic sectors. And, I mean, given the circumstances and what we see in the economy, this could happen in some names, but nothing that you could see as a trend. So net-net, we'll be managing the portfolio and keeping an eye on if there are specific loan-loss increases that we need to do punctually or specifically, we will do. But in our radar screen, that was something that was done specifically in this quarter. But we are, let's say, vigilant regarding any specific change that needs to be done.

Our next question comes from Saul Martinez with JPMorgan. Saul Martinez - JP Morgan Chase & Co, Research Division: I just have a couple of -- one follow-up question and one other question. First, Marcelo, you mentioned in your earlier remarks that your asset quality has become less correlated to the economic environment due to mix shift. And obviously, that's -- it's obvious that, that seems to have occurred. But that it could change at the end of 2015 or 2016, and start to become more pegged to the economic cycle. Can you elaborate on that? I mean, it's not clear to me why that would be the case, especially since the mix shift process should continue as we head into next year. If you can just give us a little bit more color there. And secondly, the payroll loan book is growing tremendously, it's bigger than your mortgage book, it's bigger than your auto book now. Obviously, the BMG partnership has helped. But is there any difference at all in terms of economics, the profitability of acquired loans from that partnership relative to payroll loans, for example, that you may originate yourself? Can you just give us a sense of whether the economics are also attractive especially considering this is a product with very high risk-adjusted margins?

Thank you, Saul. Let's start -- let's answer it backwards in terms of the payroll. Payroll is, as I mentioned, is key to our strategy. The difference in economics is basically if consider that we have, let's say, 2 types of originating channels. One through our branch network, and the other one through the joint venture. In throughout our branch network, basically, we have the branch costs and basically, we dilute the costs by originating the credits there. So the profitability of a loan, even if you do the proper cost allocation, which we do, for our own origination is better than originating through third parties. The risk is quite similar because the approval -- the credit approval process is the same. Okay. So on a net basis, when you originate through our own network, you get off. So that's the comment regarding payroll growth. Regarding the asset quality and being less correlated, the fact that I mentioned that is because when we are outgrowing on a portfolio like payroll, let's use that for as an example, and even mortgages. They will now -- it is around 85% of that is related to the public sector, be it [indiscernible] or be it public servants. So that where I'd say it's less correlated because those segments are not affected by unemployment. And when you look at the mix shift and you see that portfolios that are more prone to be affected by the economy, like unsecured lending and SMEs, and so on and so forth, the difference between the speed of growth between those 2 portfolios ends up being less correlated to the economy, that's where my comment came from. So as we go deeper on that, eventually, we will become more correlated to the GDP. But obviously, our best case scenario is there is no disruption in the economy. If we were to have a disruption, then the correlation will, obviously, will come into play. But we don't have a disruption scenario for next year. Saul Martinez - JP Morgan Chase & Co, Research Division: In other words, it becomes more pegged if we see a disruption or if we see a real sort of stress scenario for economic conditions.

Yes. Saul Martinez - JP Morgan Chase & Co, Research Division: Okay. And just -- okay, then fair enough. And then the fourth -- so just to elaborate on the first answer I should say, on the loan origination versus the BRL 4 billion. The BRL 4 billion that you acquired, can you give us a sense of how different the economics are between those -- the acquired portfolio and other -- are these still very profitable types of loans that your acquiring because you are obviously growing that book very, very quickly?

So what I can give in terms of color is the average commission that you probably see over the term of a loan acquired through a third party is around 15%, okay? So to the extent, I find a way of doing this acquisition through our network under that number. We are becoming more, in a way more efficient. So this is just to put you in perspective. So -- and remember, the branches there as our window to be distributing and offering services to our clients, multiple services to our clients. So it's really the more efficient we get in terms of targeting our clients, the less we're going to spend on this, let's say theoretical, 15% that we have to spend to make economic equal.

Our next question comes from Boris Molina with Santander.

I have a few questions. The first one regarding the progress in your acquisition of Corpbanca. Could you confirm if you are currently in negotiations with the IFC to amend the shareholders agreement? Or is the only authorizations for you to close the merger are related to Central Bank and regulatory approvals?

Boris, IFC is doing its homework now. I mean, they have an agreement on the existing shareholders agreement with the current shareholder, and they are doing their homework in terms of doing valuations. And we're basically -- if there are -- if there is information that they asked us, we provided that. So they're following their own course there, and we are confident that the deal provides benefits to all shareholders, including obviously themselves. So I think we're going to get closer on that. Our scenario in terms of approvals, we just got the approval from the Brazilian Central Bank for the -- to be participating on the merger, have a stake in the merger, a controlling stake in the merger. And we're seeing -- we still need to go through the approvals of the Chilean regulator and Colombian and Panama. And now as it comes to the shareholders meeting, where the shareholders of both ends need to approve that. So our estimated, closure for the transaction is first quarter 2015.

Okay. Wonderful. And I had a second question regarding the slide on your presentation about the evolution of the capital ratios under Basel III. You show a 100-basis-point improvement from the use of tax loss carryforwards. Is there any change in regulation or and taxation that would allow you to avoid having tax loss carryforward in the future? I mean, over the last years your tax loss carryforwards have been around between 6% and 7% of your shareholders equity, and this is a -- kind of it's like a nature of life. So are these going to disappear completely?

No, it's not that it's going to disappear quickly. The assumption there is if we are to consume everything we have -- and just keep in mind that at the same time, we are consuming that, we are also having the benefits of some goodwill amortization for tax purposes. So over time, as we don't have all the goodwill amortization tax benefits to be consumed, the ability to consume the tax loss carry forwards makes it -- becomes easier than having to eat into the tax loss -- the tax shelter we have from goodwill and the tax loss carry forwards.

[Operator Instructions] This concludes today's question-and-answer session. Mr. Alfredo Setubal, at this time, you may proceed with your closing statements.

Thank you, everybody, for participating with us. At this point a very good and solid results. Marcelo answered all your questions the you had. We actually were able to attend everybody. So thank you for your participation, and wait to see you again in the fourth quarter results at the beginning of next year. Thank you.

This concludes Itaú Unibanco Holding earnings conference call for today. Thank you very much for your participation. You may now disconnect.